The National President, Nigerian Association of Chambers of Commerce Industry Mines and Agriculture, Mr. Dele Oye, on Sunday voiced concern that non-payment of Foreign Exchange (FX) forwards had severely crippled affected companies, plunging many towards bankruptcy.
Oye stated that the companies’ reputations had suffered and that their relationship with foreign trading partners had been strained due to the financial burden, according to Arise News.
He said businesses and banks involved are now burdened with exorbitant interest rates, averaging over 35 per cent.
He added that the country’s financial standing abroad has suffered greatly as a result of the CBN’s actions, which have damaged confidence and trust.
The NACCIMA president who said the association had been proactive in addressing the issue of outstanding FX forwards, maintained that the body had engaged in rigorous advocacy, urging the CBN Governor, Mr. Olayemi Cardoso to reconsider the bank’s stance for several reasons.
Findings show that Nigerian corporates and SMEs are becoming increasingly concerned that the CBN’s failure to settle FX forwards could hurt the country’s economy in the future.
The central bank uses financial instruments called forwards to control currency rates and manage foreign exchange reserves.
They generally signify contracts between the CBN and a counterparty to exchange a given quantity of foreign currency at a fixed rate at a later time.
Forwards are liabilities of the apex bank which are signed off when allocated while beneficiaries are often responsible corporates and SMEs from the Organised Private Sector (OPS).
It was reported in March that the CBN said that all legitimate FX backlogs in outstanding liabilities to various sectors of the economy had been settled, fulfilling a key pledge of the CBN Governor, Mr. Olayemi Cardoso, to process an inherited backlog of $7 billion in outstanding liabilities.
